Government to create new power generation entity distinct from Eskom

The gridlock with the state utility company Eskom may have forced the government to seek alternatives.

Minister of Mineral Resources and Energy Gwede Mantashe told reporters on the sidelines of the Investing in African Mining Indaba in Cape Town that the government hoped to create a new power generation entity distinct from Eskom.

His remarks came after his opening address at the indaba on Monday morning, where he said government would give the green light to mining companies to generate energy for self-use without a license. They would be able to sell electricity if they were successful in getting a licence.

The comes as Eskom announced on Monday that load shedding would continue until at least Thursday morning. The state-run power utility has about R450bn of debt, and is not earning enough from electricity sales at current prices and volumes to pay off the interest on the debt.

Mantashe told reporters during a briefing after his address that he had invited investors to either partner with the government or invest on their own in the creation of an alternative power generation entity.

“By this time next year we hope we can say we have a site for energy generation outside of Eskom. We want people to sell energy through transmission. We want to take the pressure off of Eskom,” said Mantashe.

The minister did not provide much detail about the scope of new entity. Asked by reporters for more information, Mantashe said the state would be willing to consider “whatever investors are into”.

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